I move:
That Dáil Éireann deplores the recent number of large increases in the price of petrol and other oil products and, in view of the effects of these increases on the family budget, calls on the Government to ensure that the price of petrol and oil products to the consumer fully reflects reductions in the world price of oil.
Molaim an tairiscint seo atá faoi mo ainm agus ainm mo chara, Deputy Ger Connolly, maidir le praghasanna artola ach go háirithe ardú na bpraghasanna le déanaí. Tá na cánacha nua agus an cháin bhreis-luacha i gceist agus arduithe eile atá taréis teacht isteach ó thús na bliana. Táimid in aghaidh na n-arduithe sin agus táimid ag iarraidh ar an Rialtas athbhreithniú a dhéanamh ar an scéal ar fad agus na harduithe sin a ísliú.
My colleague, Deputy Connolly, and I put down this motion because we are very concerned about the recent trends in the price of petrol and other oil products. We were motivated to put down this motion because of the changing world situation and the downward trend in world petrol and oil prices generally. These trends are not beneficial to the consumer in Ireland. We are concerned about the extra £15 million the Minister intends to take by way of excise duty and which was announced discreetly in the Budget Statement. We regret it as another hidden tax on motorists. We are concerned about the devastating effect of these increases in the price of petrol on the household budget of the ordinary workers, and on the economy in general.
We are astonished at the sheer enormity of petrol prices here as compared with the prices in other economies in this part of the world. We now have the unenviable reputation of having the most expensive petrol in Europe. If we take the figures for the price of petrol in other economies we will get an indication of how severe the impact is here. In the United Kingdom first grade petrol is selling at £1.84 a gallon; in Sweden £1.77; in Norway £2.23; in the Netherlands £2.07; in France £2.22; and in Italy which is always regarded as the most expensive country in Europe, petrol is retailing at £2.71.
We have by far the highest priced petrol in Europe. As the Irish £ strengthens the gap with the United Kingdom will widen still further. There is now a gap of £1 between the Irish price and the British price. This is unacceptable for many reasons. Our prices are away above the average in the EEC. The price of premium petrol here is about 31 per cent higher than the EEC average. The price of our road diesel is about 45 per cent higher than the average in the EEC. These price structures are unacceptable for many reasons which I will go into now.
The burden of taxation on petrol is inescapable for virtually every adult in this State. No consideration is given to one's ability to pay. Taxation is imposed on petrol without regard to its all-embracing effects on our economy. Instead of providing a basis for the Irish economy, taxation on petrol is helping to destroy the economy. It is destroying three elements in particular. It is destroying our competitiveness; it is destroying our tourist industry; and it is reducing the living standards of our citizens.
It is destroying our competitiveness. The unit cost of production is related directly to the cost of petrol. It is also related to transportation costs. The Government stated in their latest unemployment figures statement that the first point of attack must be on the many competitive weaknesses in the external and domestic markets. The Government are responsible for one of our most glaring competitive weaknesses. The price of fuel is a significant cost in virtually every business and productive enterprise. The Government are responsible for over 50 per cent of the cost of petrol and they intend to enlarge their share still further if the price of oil falls.
The Government's attitude in taking away from the consumer the benefit of any fall in world oil prices exemplifies the narrow fiscal mentality of a Government who are concerned only with keeping their books right and not with the economic welfare of the nation. The Minister was prepared recently to reduce the excise on less essential items such as beer, spirits, wine, cigarettes and tobacco, all of which constitute discretionary expenditure and, in the case of wine and tobacco, are largely imported. He was not prepared to do the same for petrol.
The price of petrol has a detrimental effect on our tourist industry and it is making a nonsense of the promotional aspects of Bord Fáilte's campaign this year. The price of petrol is destroying the living standards of the majority of our citizens. We can no longer say petrol is a luxury item for householders. It is an everyday necessity and can no longer be regarded as discretionary day-to-day expenditure. Rural counties are very dependent on petrol. Recent household budget surveys show that about 8 per cent of weekly income of farmers making £4,500 a year was spent on petrol. This compares with about 5 per cent in families with an average wage of £130 a week in urban areas. We know that 60 per cent of rural households have cars as against 50 per cent in urban households. This shows that the increases imposed on the price of petrol recently discriminate against rural Ireland.
Petrol prices could almost be used as a barometer for activity in the economy. The costs to the motorist have gone out of control. He appears to be the one person the Minister for Finance considers he has no obligation to protect. It is not just petrol alone: all the other costs have to be included. There were the increases in road tax, insurance and in the cost of maintenance. Every aspect down to the matter of spare parts has been affected. Things have got out of control, obviously with the full support of an uncaring Minister.
We must look also at the effect on the motor trade in general. It is well known that there have been enormous job losses in the trade. Quite a number of garages are on short-time and some of them will never have an opportunity of returning to a five-day week. There are no apprentices being trained in the motor industry. The numbers have decreased year after year and it is a sad reflection on what was a much valued skill that only two apprentices were in training in the whole of the county of Mayo in 1982. I am sure a similar situation applies in other counties. When we consider the average motorist travels about 15,000 miles per year and taking petrol consumption for an average car at 30 g.p.m. the increases since 1 January are adding £3 per week to the overall cost for the average family. That must be considered in a situation where costs are increasing and where incomes are decreasing, with other levies and other forms of taxation being applied. To add this further £3 per week makes the cost of motoring virtually unbearable so far as the average citizen is concerned.
There is a danger that when people find they cannot afford to run a car because of petrol increases they will postpone getting essential repairs and maintenance work carried out. It has also been noted that there is an increase in the number of motorists who do not have car insurance. The numbers not paying road tax have increase dramatically and it must be stated that the increase in petrol which asks the average motorist to pay a further £150 per year in addition to what he was paying already will have serious consequences so far as the whole industry and revenue are concerned. I am particularly concerned that people may postpone essential repairs and maintenance works because of lack of funds. Much of the repair work has now been transferred to moonlighters in the business and, of course, this results in a huge loss of revenue to the State: loss of VAT on spare parts and on labour and loss of corporation profits tax from the companies operating in this area. This is resulting in the closure of many garages and also in other garages going on short-time working. Many of the legitimate repair shops are redundant and the blame must be laid at the door of the Government. They have no care whatever so far as motoring costs are concerned other than to load on bigger taxes and particularly increases in the price of petrol.
To wage war on the motorist is shortsighted and will be counter-productive so far as tax revenue will be concerned and we are fast approaching the time of diminishing returns as far as revenue from the sales of petrol is concerned. Tax revenue was down quite considerably last year. It covers all excise duty and VAT and these two elements are applied in no uncertain terms so far as the price of a gallon of petrol is concerned. To take further steps against the motorists must be counter-productive and it will have a serious effect on revenue to the Exchequer. The relentless punishment of what must be the most vulnerable taxpayer of all, the motorist, continues apace as though there were no end to the capacity of the individual to pay. He is being forced into a situation of taking alternative methods of dealing with the whole range of other motoring costs, the most serious being his willingness in recent times to risk going on the road without proper insurance, not to talk about the large percentage without road tax.
We must admit there has been a change in the scene over the years so far as the use of the motor car is concerned. We have to recognise that the car is in everyday use for virtually every family. We will have to take note of some of the statistics being applied to motoring so that we can evaluate the trend. Too high petrol prices are the root cause of many of the difficulties in this area. In 1980 private new car registrations numbered 93,622; in 1981 the figure was 106,074; in 1982 it was 72,775 and that drop is continuing. It is reliably estimated that the number of new cars registered this year will fall once again and perhaps will not exceed 60,000 cars. This will have a most serious effect on the number of people who are available to buy the petrol at the price the Government are forcing them to pay and it will also affect the motoring industry generally.
In 1979 there were 682,958 private cars on the roads; in 1980 there were 734,371; in 1981 the figure was 774,594 and the provisional figure for 1982 is estimated at 709,000 approximately. It is difficult to believe there has been such a vast decrease in the number of cars on the road and I found it difficult to accept that figure but the estimate has come from a very reliable source. Perhaps the reason is that because of the cost of motoring a large number of cars are not taxed. There is no doubt that petrol which is the one commodity that has to be used every day when one is motoring, the item that cannot be avoided because the wheels will not turn without it, is the one item that will be considered first and having regard to the present circumstances, people are prepared to stand back from other essential items such as road tax. The figures are a sure indicator that there is a serious down-turn in motoring by the private citizen due in the main to the increases in petrol in the past few months.
I know the Ceann Comhairle has been in the House for quite some time and I should like to remind him of the figure which applied when he and I understood pounds, shillings and pence. In 1927 it cost 1/8d a gallon and one could buy 12 gallons for £1. In 1976, which is the first year for which I have records for the price under the metric system, it was 94.8p a gallon. In 1980 it was £1.55p. I am talking about the price for premium grade. In 1981 it was £1.90 and in 1983 it is £2.88p a gallon. Without using a desk calculator I estimate that since 1977 petrol increased by 195 per cent. That increased to 23 per cent as a direct result of the action of the Government. Since March 1983 the excise duty on a gallon of petrol is 98.4p and when one considers that, one gets some indication of the grab that is on by the Government as far as petrol retail prices are concerned.
In 1970 there were 4,772 retail outlets in the country. This year the number is 3,874. Fewer people will be buying petrol. It was virtually the mainstay for the economy over the years as far as revenue was concerned. The Government cannot see that we have arrived at the stage of diminishing returns. Are they taking the Machiavellian attitude that as sales decrease they will increase the tax across the board to take up the slack irrespective of the difficulties it will cause in our competitiveness, tourist industry or standard of living?
A car is now an everyday necessity. For too long it was suggested that it was a luxury for higher income workers. The Government cannot see that the extra £3 they are asking workers to pay by way of increased petrol charges since 1 January must have a detrimental effect on their living standards and on the possibility of getting a proper wage structure this year. The total gallonage of petrol sold in 1980 here was 289,890,000. In 1981 it was 291,108,000. It has been estimated that there has been a significant decrease in gallonage sales and by significant I mean anything in excess of 3½ per cent. It is more likely to be close to 5 per cent. Do figures count for anything as far as the Government are concerned except to increase the price of a gallon of petrol? The excise duty on a gallon of premium grade is 98.4p. With VAT at 52.8p that gives a grand total of £1.51 or 53½ per cent of the pump price going into the coffers of the Exchequer on every gallon of petrol sold. That is on the £2.82 average pump price for a gallon of premium grade. What a starting figure. How has it come about? There were petrol increases over the years which were necessary on occasions. Since 1 January this Government have put 15p on on one occasion, 11p on another occasion now resulting in 14p extra. We have had a 15 per cent increase in the price of a gallon of petrol in just over 16 weeks. Still the Government are not satisfied. They are suggesting to the motorist that in some slick way they will get a further increase. The figure of £50 million was announced in a peculiar way in the budget a few weeks ago. This must mean 10p more on a gallon of petrol and it is just another tax to add to the litany of tax increases since 1 January.
It was stated last year that an increase of 18p per gallon could bring in £49 million revenue in a single year. These figures do not worry the Minister for Finance. He is adjusting the figures to suit himself in the hope, as somebody said recently, of creating a fund which he can utilise in some underhand way to purchase votes at an election.
The major Irish oil companies get their supplies of petroleum products from two sources — the UK associated companies and the Irish National Petroleum Corporation ex the Whitegate refinery. We all know the situation at Whitegate. The takeoff is about 35 per cent of the total requirements of the trade. We all recognise the total dependency on outside sources for supplies and while this is fully appreciated, as is the need for security of supply, nevertheless we should be able to take fully advantage of the current world situation. We had long-term contracts with Middle Eastern countries and these have now terminated. The way we acted at that time was honourable. We did not walk away from the contracts we had and that will guarantee us goodwill and security of supply in the future. I accept that but when contracts are entered into again there should be an escape clause so that we can benefit from world trends. The trend, as everyone knows now, is downwards but the Government are not prepared to pass on the benefit of this to the hard-pressed motorist by giving him what is his rightful due — a decrease in the cost of petrol at the pumps. I do not believe we should become involved in further contractual situations until the world market stabilises. We all know there is a glut of oil on the world market and it can be bought relatively cheaply on the spot.
We see in the newspapers the possibility of a reduction of $5 a barrel. That is pure speculation and it is confidently expected by those in the know that it could be reduced further by as much as $26 a barrel. What kind of reduction will that bring? Will the Government give a commitment that they will allow these benefits to be passed on to the the hard-pressed motorist by way of reduction in the price of petrol. The BNOC dropped the price of a barrel by $3½ recently. They supply about one-third of the total requirement of the Whitegate refinery. This could have resulted in the INPC saying immediately they could accommodate a 15p decrease. Was that passed on to the hard-pressed motorist? No. Whatever policy has been adopted by the Government as far as petrol prices are concerned, they are determined not to give the results of world price reductions to motorists here. We can only be suspicious as to what underlying policy they have in depriving the hard-pressed motorist of something which is his due.
It has been suggested by many that there are exorbitant profits being made by the oil companies supplying this market. In my view the time is opportune for an investigation into the sources of supply to the Irish oil companies and to the pricing in-structure to the Irish petroleum companies, how it compares with the world price situation and if there are better arrangements that could be achieved for our motorists and those who rely on the petrol business. The price of petrol cannot be stabilised without some bold initiatives being taken which would concern purchasing, strategy, storage of strategic supplies and the source of supply. If the Government had the will to give the benefit of world prices to the motorist, these avenues could be considered.
Let me nip the metrication device in the bud. It is important that we retain the price per gallon as well as the price per litre at the source to the consumer, namely, the petrol pump. While I accept the inevitability of metrication, I believe it should be obligatory that the price per gallon be displayed at the pumps as well as the price per litre. The litre only pumps totally disorientate the consumer and make it difficult for the purchaser to ascertain how much per gallon he is paying. Until such time as the advertisements in the mass media stop advertising economies in motoring for their car products in miles per gallon that practice should continue. There is an educational process to be undertaken and I advise the Government before they attempt to devastate the motorists so far as petrol prices are concerned, to consider it well.
Is it too much to ask that the voracious appetite of the all-demanding Minister for Finance be checked so that the long suffering and harassed motorist might get some relief from the windfall of falling world prices, relief which his fellow motorists already enjoy in neighbouring countries? It is time for the Minister to come clean on the real story behind the petrol prices as they apply here.
The measures taken by the Coalition are having a devastating effect on the Border counties. The higher the gap between the prices the more revenue is likely to be lost. Using the census and the household budget survey I estimate that there are about 108,000 households in the six Border counties and the total spending on petrol in these areas would be a very conservative estimate of £50 million a year, of which over half should and would go to the Exchequer. If the inhabitants of the Border counties buy even 40 per cent of their petrol across the border, the Exchequer loses £10 million; if it is only 30 per cent the Exchequer would lose £7.5 million. The average family spending about £480 on petrol this year would be saving about £120 a year, even allowing for the cost of driving the extra miles to get the petrol. Households in the border counties would probably have incomes amounting to an estimated £1,400 million this year. Only 70 per cent of that would be spent on the type of articles that could be brought across the border. Let us take the figure at a round £1,000 million. Every one per cent spent across the border represents £10 million and if even 10 per cent of income is spent north of the border, £100 million is taken out of our economy and the Exchequer loses between £20 million and £30 million. In addition, if one considers trips from areas outside the immediate border areas — even as far away as Dublin — the Minister may be losing up to £50 million for the Exchequer and up to £200 million or £300 million for the economy in 1983. We should not be creating this kind of incentive for the maintenance of the Border.
There is a very serious and difficult situation arising because of the inactivity of the Minister for Finance in not giving the motorist the benefit of something which is common knowledge to every motorist who has read a newspaper or listened to announcements in the media over the last number of weeks. It is not just a possibility of a few pence reduction that might have to be altered again in a couple of weeks. There is a serious would glut of oil. Those who produce this international resource meet daily to agree not just if they might bring down the price of the day's product but by how much they will reduce it. There is no doubt in the mind of the ordinary motorist that huge reductions are available for the barrel of oil, but they also know that the pricing structure for the Irish petroleum companies is not in accordance with the best deal that can be got elsewhere.
The motorists want to know what kind of pricing structure there is, and how there is such a big differential. They want to know what the Government are doing about this and what they propose to do to provide a different arrangement which will guarantee security of supply and also that there will be no fluctuations in prices in the foreseeable future; the only fluctuations they want to see are downwards. This present price reduction is reflected in every European economy but the only motorist who cannot get a cheaper gallon of petrol is the Irish motorist. He is being mulcted by the avaricious Minister for Finance who seems to demand ever-increasing prices for the gallon of petrol to satisfy the Coalition's lack of policy to deal with our outstanding economic difficulties. He decides that the quickest and easiest way to get the most money possible is to attach further increases to the gallon of petrol. There has been a litany of increases on the unsuspecting motorist since 1 January, not just by budgetary provision but also, as some commentators suggested, by stealth, by announcing them in advance so that the unsuspecting motorist might not see them at the pumps.
This is not a satisfactory situation so far as the motorist is concerned. His standard of living has been devastated. I have quantified that in pounds as far as the motorist is concerned. It must have a very debilitating effect, not just on the family motorist, but on the economy in general and there will certainly be a reduction in tax revenue. Instead of dealing with the recession, they have put the country into depression and they must carry the blame for it. That is why we are asking the Minister to change his tack and allow the benefit of the world situation in reduced prices of crude oil to be applied to the over-harassed and over-penalised motorist in petrol prices.
